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Southwestern Provides 2019 Production, Capital and Cost Data
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Southwestern Energy Company (SWN - Free Report) released projections for 2019 production, capital and operational costs. The estimates are based on NYMEX gas price of $2.85 per MMBtu and WTI oil price of $50 per barrel in 2019.
In 2018, Southwestern invested about $1.25 billion. Internal cash flow was used to finance the spending and was within the initial capital guidance. Production in Appalachia was 702 billion cubic feet equivalent (Bcfe), of which 20% was liquids. During 2018, general & administrative (G&A) and interest cost saving initiatives generated savings of $155 million.
For 2019, capital spending is estimated in the range of $1,080-$1,180 million. The projection is lower by $200 million compared with the estimated 2019 plan at the time of the Fayetteville sale announcement and $120 million less than 2018 level. A significant chunk of the investments will be apportioned for Southwest Appalachia. Production in the region is estimated to grow 20% to 75,600 barrels per day. Northeast Appalachia is expected to continue generating free cash flow, while maintaining flat production.
Total production in 2019 is estimated in the range of 750-785 Bcfe. Of which, natural gas is expected to be 588-616 Bcfe. Natural gas liquids and condensates are projected in the range of 26,950-28,250 thousand barrels (MBbl).
During the first quarter of 2019, Southwestern expects total production of 176-184 Bcfe. Of which, natural gas is expected in the range of 140-146 Bcfe and natural gas liquids and condensates is projected to be 6,075-6,400 thousand barrels (MBbl).
Natural gas discount to NYMEX including transportation is estimated at $0.70 -$0.80 per Mcf. Oil discount to West Texas Intermediate (WTI) including transportation is projected in the range of $9.00 -$11.00 per Bbl.
In 2019, lease operating expenses and G&A expenses are expected in the range of $0.92-$0.97 per Mcfe and $0.18-$0.22 per Mcfe, respectively.
In 2019, the company expects to drill 95-115 wells, plans to complete 100-120 wells and proposes to place 90-110 wells to sales. Majority of the drilling and well completion activity will be initiated during the first half of 2019. The average well cost is anticipated to decline 25% and reach about $875 per lateral foot. The average lateral length is expected to increase 35% to more than10,000 feet.
Zacks Rank & Key Picks
Southwestern Energy carries a Zacks Rank #3 (Hold).
Evergy, through its operating subsidiaries — Kansas City Power & Light Company (KCP&L) and Westar Energy, Inc — provides clean, safe and reliable energy in Kansas and Missouri. The company delivered average negative earnings surprise of 11.1% in the last four quarters.
Headquartered in Houston, TX, Sunoco operates as a wholesale fuel distributor. The company is expected to witness year-over-year earnings decline of 38.9% in 2018.
Bristol-based Contura Energy is a mining company. The company reported average negative surprise of 17.9% in the trailing four quarters.
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Southwestern Provides 2019 Production, Capital and Cost Data
Southwestern Energy Company (SWN - Free Report) released projections for 2019 production, capital and operational costs. The estimates are based on NYMEX gas price of $2.85 per MMBtu and WTI oil price of $50 per barrel in 2019.
In 2018, Southwestern invested about $1.25 billion. Internal cash flow was used to finance the spending and was within the initial capital guidance. Production in Appalachia was 702 billion cubic feet equivalent (Bcfe), of which 20% was liquids. During 2018, general & administrative (G&A) and interest cost saving initiatives generated savings of $155 million.
For 2019, capital spending is estimated in the range of $1,080-$1,180 million. The projection is lower by $200 million compared with the estimated 2019 plan at the time of the Fayetteville sale announcement and $120 million less than 2018 level. A significant chunk of the investments will be apportioned for Southwest Appalachia. Production in the region is estimated to grow 20% to 75,600 barrels per day. Northeast Appalachia is expected to continue generating free cash flow, while maintaining flat production.
Total production in 2019 is estimated in the range of 750-785 Bcfe. Of which, natural gas is expected to be 588-616 Bcfe. Natural gas liquids and condensates are projected in the range of 26,950-28,250 thousand barrels (MBbl).
During the first quarter of 2019, Southwestern expects total production of 176-184 Bcfe. Of which, natural gas is expected in the range of 140-146 Bcfe and natural gas liquids and condensates is projected to be 6,075-6,400 thousand barrels (MBbl).
Natural gas discount to NYMEX including transportation is estimated at $0.70 -$0.80 per Mcf. Oil discount to West Texas Intermediate (WTI) including transportation is projected in the range of $9.00 -$11.00 per Bbl.
In 2019, lease operating expenses and G&A expenses are expected in the range of $0.92-$0.97 per Mcfe and $0.18-$0.22 per Mcfe, respectively.
In 2019, the company expects to drill 95-115 wells, plans to complete 100-120 wells and proposes to place 90-110 wells to sales. Majority of the drilling and well completion activity will be initiated during the first half of 2019. The average well cost is anticipated to decline 25% and reach about $875 per lateral foot. The average lateral length is expected to increase 35% to more than10,000 feet.
Zacks Rank & Key Picks
Southwestern Energy carries a Zacks Rank #3 (Hold).
A few better-ranked players in the energy space are Evergy, Inc (EVRG - Free Report) , Sunoco L.P (SUN - Free Report) and Contura Energy (CTRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Evergy, through its operating subsidiaries — Kansas City Power & Light Company (KCP&L) and Westar Energy, Inc — provides clean, safe and reliable energy in Kansas and Missouri. The company delivered average negative earnings surprise of 11.1% in the last four quarters.
Headquartered in Houston, TX, Sunoco operates as a wholesale fuel distributor. The company is expected to witness year-over-year earnings decline of 38.9% in 2018.
Bristol-based Contura Energy is a mining company. The company reported average negative surprise of 17.9% in the trailing four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>